Oil Price Predictions: What Happens If Iran Closes the Strait of Hormuz? Insights from Goldman Sachs and Experts

Investors need to stay alert. Recent events show that Iran could still impact oil prices and supply in the Middle East. Even though the market initially brushed off concerns after Iran fired missiles at a U.S. airbase in Qatar, energy experts warn that the situation is far from over.

The Strait of Hormuz is a vital route for oil, with about 20 million barrels passing through each day. If Iran decided to disrupt this passage, it could dramatically spike oil prices. According to Goldman Sachs, a major slowdown in oil flow through the strait could push prices to $110 per barrel briefly. UBS echoes this sentiment, stating prices could rise over $120 if the strait were to close.

However, some experts, like Helima Croft from RBC Capital Markets, suggest that we shouldn’t take the situation lightly. “We would caution against thinking the worst is behind us,” she said. Analysts are concerned that if Iran feels cornered, they might use less conventional tactics to disrupt shipping, such as targeting vessels or mining parts of the strait.

Historically, the Strait of Hormuz has been a flashpoint. In the 1980s, during the Iran-Iraq War, shipping was frequently threatened, leading to the U.S. intervening to protect maritime traffic. Today, the stakes remain high, with a complex web of international relations at play.

While experts believe it’s unlikely Iran will fully close the strait, any disruption could have lasting effects. Minna Kuusisto from Danske Bank notes that even a few targeted attacks could deter shipping, causing significant price changes in the market. “Insurance companies would hesitate to cover ships in a risky area,” she explained.

In social conversations, many people express concern about oil prices rising again, particularly as tensions escalate. The fear of a possible conflict in the region resonates with daily news and fuels public chatter.

Keeping an eye on these developments is crucial. The energy landscape can shift quickly, and even small actions can lead to large consequences in the world of oil supply and prices.



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